The Romanian state received no revenue from the sale of 16 percent of the cigarettes consumed in Romania last year, according to a story in The Romania Insider.
This is because those cigarettes were sold by people who were involved in the illegal trade in tobacco products and who reaped the profit from those sales.
If those cigarettes had been sold legally, tax-paid, the government would have received an additional €640 million.
It is estimated that more than 4.3 billion cigarettes were sold on Romania’s black market last year, while the country’s agencies seized about 150 million.
An operation mounted during the first half of 2017 is said to have reduced smuggling, but according to the local affiliate of British American Tobacco, the illegal trade boomed once that operation stopped.
The Insider said that Romania’s tobacco-products black market was bigger than the EU average, which stood at about nine percent.
From 2010 to 2017, Romania was said to have ‘lost’ about €5.4 billion to the illegal trade in cigarettes.
Tag: Romania
Illegal trade at 16 percent
Glowing in Romania
British American Tobacco Romania has launched Glo, described as the company’s newest and most innovative tobacco heating product.
“British American Tobacco is the absolute industry leader in Romania, accounting for 55 percent of the whole tobacco products market, with Kent alone representing a quarter of the total domestic consumption,” Richard Widmann, area director, BAT Southern Central Europe, was quoted as saying in a note posted on the company’s website.
“The launch of Glo in Romania, as a first in the European Union, completes our portfolio with an alternative, completely innovative product with the potential to be significantly less risky than traditional cigarettes.”
According to the press note, 1 in 10 smokers have switched to this tobacco heating product in Sendai, one of Japan’s largest cities, where the device was launched in December 2016.
‘In addition, since launching Glo in Japan, 60 percent of growth in the tobacco heating product category is from Glo,’ the press note said.
BAT describes Glo as a tobacco heating product designed to offer ease of use and best-in-class quality and safety standards.
It is said to include a number of safety features to ensure ‘a quality user experience, for example’:
- It has a high-quality aluminium sleeve and robust plastic base. The internal materials consist of thermal plastic which is heat resistant, a vacuum tube which ensures the exterior remains cool to the touch, rapid heating technology and a high-quality lithium battery.
- It will shut off in the event of over-heating and has features that protect it from being charged incorrectly.
- The device has been independently tested by a globally-recognised organisation against international safety standards for consumer devices.
HEETS capacity building
Philip Morris International said today that it was planning to invest about €490 million in transforming its cigarette production factory in Otopeni, near Bucharest, Romania, into a high-tech facility for manufacturing HEETS, the tobacco units used with the electronic tobacco heating device IQOS.
‘The conversion of the factory into a HEETS production facility has already commenced and is expected to be completed and fully operational by 2020, the company said in a note posted on its website.
‘The investment will create about 300 additional jobs for highly-skilled employees at the Romanian facility, which currently employs approximately 600 people.’
Romania will join a growing list of countries where PMI manufactures heated tobacco units for IQOS.
‘Earlier this month, PMI announced plans to install two new high-tech production lines in Neuchâtel, Switzerland, to produce HEETS,’ the note said.
‘In June, PMI announced it would expand capacity at the company’s heated tobacco unit manufacturing facility in Bologna, Italy and also announced plans to build a new facility for HEETS in Dresden, Germany. In addition, PMI will also convert its cigarette factories in Greece and Russia and by the end of 2018, PMI plans to have a total annual installed capacity of approximately 100 billion heated tobacco units.’
IQOS and HEETS have been available in Bucharest since November 2015 and in 16 cities throughout Romania from the beginning of this year.
IQOS is said to be available in key cities in more than 27 markets and is expected to be available in 30-35 markets, either key cities or nationwide, by the end of 2017, as capacity permits.
“Our investment in Romania further demonstrates our commitment to a future in which smoke-free products ultimately replace cigarettes,” said André Calantzopoulos, PMI’s CEO. “We are encouraged by the 2.9 million smokers around the world who have already given up smoking and switched to IQOS. We expect this momentum to continue and the conversion of the Romanian facility will help us to meet the growing demand from adult smokers for better alternatives to cigarettes.”
IQOS is one of what PMI refers to as four scientifically substantiated smoke-free product platforms that it is developing ‘to address adult smoker demand for better alternatives to cigarettes’.
‘Since 2008, PMI has hired more than 400 scientists and experts and invested over US$3 billion in research, product development and scientific substantiation for smoke-free products,’ the note said. ‘The company openly shares its scientific methodologies and findings for independent third-party review and verification, and has published its research in over 200 articles and book chapters since 2011. Results of scientific research conducted by PMI to date indicate that IQOS is likely to reduce the risk of harm compared to cigarette smoking, and is a better choice for those who would otherwise continue to smoke.’
Investing in Romania
British American Tobacco (BAT) Romania will invest €60 million in updating and expanding its Ploiesti factory, reports The Diplomat. The company will construct a new, 4,000 square- meter production hall and refurbish its existing facilities.
In November 2016, British American Tobacco announced that it would invest around €21 million annually in the Ploiesti plant for a five-year period. But the manufacturer has decided to triple this year’s investments as the factory is slated to start producing volumes that were previously manufactured in Germany and Bulgaria.
The factory’s output is expected to increase by 30 percent. The number of countries supplied by Ploiesti will increase from 35 to 40. The Ploiesti development will create 120 new jobs by the end of the year. At present, about 700 employees and 150 contractors work in the production unit in Ploiesti.
“We want to continue investing in Romania and we hope that the Romanian government will ensure the legislative and fiscal predictability and the necessary political stability,” Gemma Webb, general manager of BAT Romania was quoted as saying.
“We underline again that one of the prerequisites for sustainable economic growth is the ongoing dialogue between authorities and business.”
BAT’s Ploiesti plant is said to be the second-largest factory in Europe.
Countering the black market
Photo by mscaprikell A new campaign spearheaded by British American Tobacco Romania that is seeking further to reduce the black market in tobacco products is a continuation of a collaboration between the company and the Romanian authorities, according to a story by ACTMedia News Agency.
The collaboration saw the reduction of the black market from 36.3 percent at the beginning of 2010 to 16.8 percent in 2016. The next stage aims to get it down to 10 percent.
“The illegal traffic of cigarettes must drop,” said Ileana Dumitru, public relations manager of BAT Romania.
“Each sixth cigarette smoked in Romania comes from illegal traffic which means less income for the state budget.
“We want to support the Romanian authorities to reach its objective to bring the black market to the European average of 10 percent.”
According to the company, Romania has 2,000 km of borders with non-EU countries where the price of tobacco can be six times lower than in Romania.
The state budget was said to lose almost €50 million every month due to the black market and, over the past seven years (2010 – 2016), the losses were put at €4.8 billion.
For every percentage added to the illegal tobacco market, the state budget reportedly loses annually another €40 million.
As part of the campaign, BAT Romania is making public information about where in the country illicit cigarettes are intercepted and where the main negative effects of smuggling are felt.
The company is hoping, too, to involve the public in reporting any suspicious activities possibly related to smuggling.
Smoking ban challenged
The Romanian Minister of Health, Vlad Voiculescu, has said that social democrat MPs are trying to reverse the provisions of an anti-tobacco law that ban smoking in enclosed public places, according to a story in the Business Review.Voiculescu wrote on his Facebook page that the MPs would try to get approval from the Committee for Human Rights for the removal of the smoking-ban provisions.
He said also that the parliament’s Health Committee, which is led by social democrats, had proposed amendments to the bill that was signed into law this spring.
“The Senate has tacitly approved the law so that smoking would be possible, practically, in any enclosed space,” Voiculescu wrote.
The Chamber of Deputies will have the final say on the proposed changes to the law.
“The current form of the anti-smoking law is just one of the points that deserves to be defended by the whole society, against the interests of the tobacco industry and of the interests of some members of the parliament,” said Voiculescu.
The Romanian Minister of Health, Vlad Voiculescu, has said that social democrat MPs are trying to reverse the provisions of an anti-tobacco law that ban smoking in enclosed public places, according to a story in the Business Review.